Guilt Bars Federal Gelt

A landfill owner who pleads guilty to violating the Clean Water Act can be barred from doing business with the federal government or participating in federal aid programs, under a ruling by a federal district court. [Burke v. U.S. Environmental Protection Agency, No. 99-2581, D.D.C., Jan. 11, 2001]

Between 1989 and 1998, Paul Burke was the president and sole shareholder of ACMAR Regional Landfill, which owned and operated a municipal solid waste landfill in Alabama. The site borders on a creek, which flows into a river that provides drinking water for Birmingham residents. In 1990, the state issued a waste disposal permit for the site and a permit allowing discharge of uncontaminated stormwater runoff into the creek.

In 1998, Burke pleaded guilty to criminal charges stemming from leachate discharge into the creek. He was fined $10,000 and sentenced to eight months in prison. ACMAR pleaded guilty to illegally expanding the landfill, disposing of waste in an unpermitted area and defrauding landfill customers. The company was fined $1.8 million and ordered to develop an environmental compliance plan. Under his plea agreement, Burke sold ACMAR to another operator.

Upon his conviction, EPA suspended Burke from eligibility for government contracts pending a proposed five-year debarment. Burke contested the proposed sanction in a formal agency hearing. Based on the evidence, EPA officially debarred Burke from federal assistance, loans and benefit programs, and from federal contracts for a five-year period. [EPA Case No. 98-0075-01, Aug. 30, 1999] Burke challenged the decision in federal district court.

Upholding the debarment, U.S. District Judge Henry H. Kennedy Jr. ruled that EPA properly examined the facts and adequately explained its decision.

Debarment is a discretionary measure to protect the government from the risk of dealing with an individual who lacks “business integrity or business honesty.” 40 C.F.R. § 32.305(a)(4) Based on prior misconduct, the proceeding addresses an individual's current business responsibility, and considers any mitigating factors that show the risk has been eliminated and debarment is unnecessary.

Judge Kennedy found that EPA acted reasonably in linking Burke's misconduct and his business integrity. Quoting from the EPA's decision, the court said:

“Operation of landfills in an environmentally compliant manner protects the environment … human health and safety. The negligent discharge of leachate, in the course of Mr. Burke's commercial operation … raises serious questions about his business integrity.” The “totality of the circumstances — especially that Burke was the president and sole owner of ACMAR — gives rise to adverse inferences regarding Burke's business practices.”

Additionally, the court found that the administrative record adequately reflected the EPA's consideration of the relevant mitigating factors. The court found that Burke's misconduct, especially his misleading customers that solid waste would be lawfully disposed of, supported a five-year debarment even though three years was customary.

The legal editor welcomes comments from readers. Contact Barry Shanoff via e-mail: [email protected]

The columnist is a Washington, D.C., attorney and serves as general counsel of the Solid Waste Association of North America.